The Federal Trade Commission has unanimously dismissed a price discrimination lawsuit against PepsiCo that was filed just days before President Trump’s inauguration, with commissioners condemning it as a politically motivated case lacking legal merit.
At a Glance
- FTC voted 3-0 to dismiss a Robinson-Patman Act lawsuit against PepsiCo alleging preferential pricing to large retailers
- FTC Chair Andrew Ferguson criticized the lawsuit as a “nakedly political effort” rushed through before Trump’s inauguration
- The current FTC panel consists of three Republican commissioners after two Democratic commissioners were removed by President Trump
- Former FTC Chair Lina Khan argued the lawsuit would have protected consumers from higher prices and supported small businesses
- PepsiCo welcomed the decision, affirming its commitment to fair and competitive pricing
FTC Unanimously Dismisses “Politically Motivated” PepsiCo Case
The Federal Trade Commission has voted 3-0 to dismiss a lawsuit against PepsiCo that alleged the beverage giant provided preferential pricing to large retailers, violating the Robinson-Patman Act. The case, which was initially filed in the U.S. District Court for the Southern District of New York, was authorized on January 17, 2025 – just three days before President Trump’s inauguration. The lawsuit claimed PepsiCo engaged in price discrimination through side payments, unauthorized discounts, and preferential services to certain favored customers.
FTC Chairman Andrew Ferguson did not mince words when explaining the commission’s decision to drop the case, calling it “a nakedly political effort to commit this administration to pursuing little more than a hunch that Pepsi had violated the law.” Ferguson added, “Taxpayer dollars should not be used for legally dubious partisan stunts. The FTC’s outstanding staff will instead get back to work protecting consumers and ensuring a fair and competitive business environment.”
The day the FTC launches a legally incoherent investigation of Media Matters to intimidate Democrats they dismiss a legitimate case against Pepsi for colluding with Walmart to harm smaller stores via price discrimination, calling it 'politically-motivated.' https://t.co/xgs3Uygnv7
— Matt Stoller (@matthewstoller) May 22, 2025
Republican-Led Commission Faces Democratic Criticism
The current FTC panel consists of three Republican commissioners after President Trump removed the two Democratic commissioners who had previously served on the five-member panel. Those Democratic commissioners are currently contesting their dismissal as illegal, adding another layer of political tension to the commission’s activities. The lawsuit against PepsiCo was initiated during the tenure of former FTC Chair Lina Khan, who was appointed during the Biden administration.
“This lawsuit would’ve protected families from paying higher prices at the grocery store and stopped conduct that squeezes small businesses and communities across America.”, said Former FTC Chair Lina Khan.
PepsiCo has welcomed the FTC’s decision to dismiss the lawsuit, reaffirming its commitment to fair and competitive pricing practices. The dismissal comes amid continued scrutiny of major corporations over pricing strategies, with the White House and congressional Democrats remaining focused on potential price gouging. Just days before the FTC’s announcement, top Democrats had sent a letter to PepsiCo seeking information about its pricing strategy.
Commission Prioritizes Resource Allocation
Commissioner Melissa Holyoak emphasized the importance of the FTC focusing its resources on cases with stronger legal foundations. “The staff at the Federal Trade Commission—both economists and lawyers—are highly skilled professionals, and we as a Commission should not have sent them into court to fight a losing battle. Today’s dismissal allows our dedicated staff to focus on bringing enforcement actions where we have reason to believe the law has been violated, and where they can do what they do best—protect American consumers.”
“The staff at the Federal Trade Commission—both economists and lawyers—are highly skilled professionals, and we as a Commission should not have sent them into court to fight a losing battle. Today’s dismissal allows our dedicated staff to focus on bringing enforcement actions where we have reason to believe the law has been violated, and where they can do what they do best—protect American consumers.”, added FTC Commissioner Melissa Holyoak
The dismissal of this case reflects a significant shift in the FTC’s enforcement priorities under the Trump administration. While the Biden-era FTC under Lina Khan had taken a more aggressive approach toward perceived corporate abuses, the current Republican-led commission appears to be setting a higher bar for the cases it pursues. The FTC continues to encourage the public to report antitrust concerns while maintaining its focus on what the current leadership views as clearer violations of consumer protection laws.
